Boeing Changes the Nature of Its Business with Global Collaboration Essay

Boeing, the $55 billion Chicago-based aerospace company, has been a major player in the global economy for almost a century. But now the company is undertaking a far-reaching transformation as it uses cutting-edge materials and electronics and high-level technology for the design and assembly process of its new passenger plane –the Boeing 787. The new plane, nicknamed the â€Å"Dreamliner,† is Boeing’s bid for market leadership in competition with Airbus. The new midsize passenger jet will have an outer shell and about half of its parts made of carbon-fiber-reinforced plastic, which will make it lighter and give it better fuel economy. In January 2006, the company had 291 firm orders and 88 commitments from 27 airlines for the new 787, which will seat from 250 to 330 passengers in varying configurations. The list price is about $150 million per plane. The previous state of the art in aviation manufacturing was to have global partners work from a common blueprint to produce parts-actually, whole sections of the airplane-that were then physically shipped to a Boeing assembly plant near Seattle to see if they fit together. Prior to the 787, wood mock-ups of planes would be constructed to see if parts built by partners around the world would really fit together. When the process failed, the cost in time and production was extreme. Boeing’s shift goes beyond making planes faster and cheaper. The new business model takes Boeing from manufacturing to a high-end technology systems integrator. In 2004, Boeing’s IT systems people were consolidated into the Boeing Technology Group. Now parts are designed from concept to production concurrently by partners (including companies in Japan, Russia, and Italy) and â€Å"assembled† in a computer model maintained by Boeing outside its corporate firewall. Boeing’s role is integrator and interface to the airlines, while the partners take responsibility for the major pieces, including their design. Boeing still takes the hit if the plane fail and deliveries are late, but the actual cost of development and manufacturing is spread across its network of collaborators. At the same time, building such global relationships may help the company sell its planes overseas. The biggest savings are the time saved through the online collaboration process (from 33 to 50 percent), creating a huge competitive advantages. Collaboration is a necessity for Boeing for several reason. Airplanes are huge and enormously complex. Politically, sales of a â€Å"global product† are enhanced when people in other countries are building parts of the airplane. Companies in these countries may then buy from Boeing. Basic collaboration is done through information-flow tools such as Microsoft Office and SharePoint. Boeing and partners are using Dassault Systemes 3D and Product Lifecycle Management solutions. Other IT tools used are a product suite from Exostar LLC, with which Boeing can share two-dimensional drawings, conduct forward and reverse auctions, and respond to RFPs, and an application called Catia. The plane is designed at Global Collaboration Environment, a special online site maintained by Boeing. There levels of collaboration are facilitated between teams and companies. In the first level-design collaboration- all parties involved log in and make their changes electronically in the blueprints, and the team works together. Quality is improves because the computer finds the mistakes. The next level involves suppliers working with their supply chains. The third level is real-time collaboration involves a considerable amount of product lifecycle management across multiple countries enabled by technology that differentiates Boeing’s new model from the previous kinds of global relationships. Boeing also uses the new partnership to solicit ideas of how to improve designs, integration, and so on. This results in cost-cutting. Boeing maintains 10 multimedia rooms at its Everett, Washington, complex for the use of collaboration teams. These are open 365 days a year, 24 hours a day. A visualization application developed by Boeing allows the teams to do real-time design reviews of complex geometry without any Lag time as the models load. Meetings are conducted in English, with sidebar conversations, as needed, in a team member’s native language. Collaborative design also speeds the design process, helping Boeing to avoid expensive penalties from its customers if the plane is not delivered on time, and it gives the company more flexibility in simultaneously designing multiple versions of the 787 that are part of its wide-ranging appeal in the marketplace. Finished designs are stored in another Dassult product, Enovia, which is also maintained by Boeing. This has become an enormous data-management task. The issue of security has also been a concern; however, security technology has developed to the point that the security of the information is assured. Collaboration across cultures and time zones can raise a host of issues about the way people work together. The adjustment of management practice to the networked, team-oriented approach is important to consider when redesigning human resources practices to meet virtual resource needs and when developing a custom-tailored collaboration platform.